United States District Court, E.D. Pennsylvania
COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF EDUCATION, Plaintiff,
D.E., individually and on behalf of A.H.D. and A.D., and Y.A.L.E. SCHOOL, Defendants. DARLINE E., individually and on behalf of Az.D. and Am.D., Plaintiff,
PEDRO RIVERA, in his official capacity as Secretary of Education for the Commonwealth of Pennsylvania Department of Education, and COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF EDUCATION, Defendants.
F. KELLY, SR. JUDGE
consolidated action stems from a Pennsylvania hearing officer
ordering Plaintiff Commonwealth of Pennsylvania Department of
Education (“PDE”) to reimburse two educational
trust funds and satisfy an unpaid private school tuition
reconciliation that Young Scholars Kenderton Charter School
(“Kenderton Charter”) allegedly owed to Defendant
Y.A.L.E. School (“Y.A.L.E.”). PDE filed an
Amended Complaint alleging three counts: Count I is against
Defendant D.E. (“Parent”) under the Individuals
with Disabilities in Education Act (“IDEA”), 20
U.S.C. §§ 1400 et seq., and seeks reversal
of the hearing officer's orders requiring PDE to
reimburse the educational trust accounts and pay the tuition
reconciliation. Counts II and III are against Y.A.L.E. and
are for unjust enrichment and indemnification, respectively.
before the Court is Y.A.L.E.'s Motion to Dismiss, which
seeks dismissal of the claims of unjust enrichment and
indemnification. For the reasons noted below, Y.A.L.E.'s
Motion to Dismiss is granted in part and denied in part.
is the mother of A.H.D. and A.D. (collectively,
“Students”), who are eligible for special
education and related services under the IDEA. (Am. Compl.
¶ 18.) Both Students were enrolled at Kenderton Charter
for some time. (Id. ¶ 19.) In July 2014, Parent
filed two due process complaints on behalf of Students,
seeking an order requiring Kenderton Charter to place the
Students at a private school and provide each with a
compensatory education. (Id. ¶ 21.) In December
2014, administrative decisions were docketed that ordered
Kenderton Charter to place Students at a private school for
the remainder of the 2014-2015 school year, pay their private
tuition, and provide compensatory education. (Id.
¶¶ 22, 24.) Kenderton Charter placed Students at
Y.A.L.E. (Id. ¶¶ 23, 25.) In addition, it
created two education trust funds with the Advocacy Alliance
Education Fund Trust to satisfy Students' compensatory
education awards. (Id. ¶ 26.)
Charter paid Y.A.L.E. tuition invoices for the education
services provided to Students during the 2014-2015 school
year, and it maintained Students' placement at Y.A.L.E.
for the 2015-2016 school year. (Id. ¶¶
27-28.) In September 2015, Y.A.L.E. and Kenderton Charter
executed contracts providing that Kenderton Charter pay
monthly tuition invoices to Y.A.L.E. for the education
services during the 2015-2016 school year. (Id.
¶ 29.) Kenderton Charter paid Y.A.L.E. all of the
monthly tuition invoices associated with A.H.D.'s
education, except for the months of May and June 2016, which
totaled $8, 872.50. (Id. ¶ 33.) Similarly,
Kenderton Charter failed to pay monthly tuition invoices
associated with A.D.'s education for April, May, and June
2016, which totaled $16, 134.80, as well as a 2015-2016
tuition reconciliation that totaled $4, 386.00. (Id.
¶¶ 35-36.) Kenderton Charter closed at the end of
the 2015-2016 school year and abandoned its charter.
(Id. ¶ 37.)
enrolled in the School District of Philadelphia following
Kenderton Charter's closure. (Id. ¶ 39.)
While enrolled in the School District of Philadelphia,
Students continued to be educated at Y.A.L.E., and there was
no disruption of their education throughout at least the
2016-2017 school year. (Id. ¶ 40.) Beginning in
July 2016, the School District of Philadelphia was
responsible for satisfying Students' tuition invoices
from Y.A.L.E. (Id. ¶ 41.)
September 2016, Parent's counsel informed PDE of the
unsatisfied monthly invoices associated with Students'
2015-2016 school year at Y.A.L.E. and asked PDE to fulfill
Kenderton Charter's obligation to pay the tuition.
(Id. ¶ 43.) PDE informed Parent in October 2016
that it would not pay the tuition bills Kenderton Charter
owed to Y.A.L.E, stating that payment of the bills was an
issue between Kenderton Charter and Y.A.L.E. (Id.
¶ 46.) Sometime after, Parent's counsel provided
Y.A.L.E. with information for contacting and obtaining the
tuition payments from Students' trust accounts.
(Id. ¶ 47.) In January 2017, following receipt
of Parent's counsel's information, Y.A.L.E. contacted
Students' trusts and requested payment of the unpaid
tuition owed. (Id. ¶ 48.) The following month,
Y.A.L.E. contacted Parent and asked Parent to authorize the
trusts to pay the tuition invoices. (Id. ¶ 49.)
Parent then authorized the trusts to pay Y.A.L.E. for the
unpaid tuition. (Id. ¶ 50.)
February 16, 2017, Parent filed two due process complaints on
behalf of A.D. and A.H.D. against PDE and Kenderton
Charter. (Id. ¶ 51.) The due process
complaints sought reimbursement of tuition that Parent
allegedly paid to Y.A.L.E. in satisfaction of the monthly
tuition invoices. (Id. ¶ 52.) Although
A.D.'s due process complaint did not seek payment of the
$4, 386.00 tuition reconciliation invoice, Parent and PDE
agreed that the hearing officer could determine whether PDE
was obligated to pay it. (Id. ¶ 54.) PDE then
requested confirmation that Parent paid Y.A.L.E. for the
education services and sought copies of the payment receipts.
(Id. ¶¶ 55-56.) Parent's counsel
informed PDE that “[Y.A.L.E.] School ‘has been
asking Parent to satisfy the outstanding invoices for both
[A.H.D. and A.D.]. I was under the impression that Parent had
satisfied those invoices. But based on my inquiry this
morning, I now believe that the invoices will be satisfied
imminently.'” (Id. ¶ 57) (ellipses
omitted) (second alteration in original). By check dated
February 23, 2017, the trusts paid $8, 872.50 from
A.H.D.'s compensatory education funds and $15, 134.80
from A.D.'s compensatory education funds.
Parent submitted the due process matters to the hearing
officer for a decision on stipulations of fact without the
need for a hearing. (Id. ¶ 61.) On July 6,
2017, the hearing officer issued two decisions relating to
Students' due process matters, finding and ordering PDE
to pay the monthly invoices associated with Students'
education services, as well as the tuition reconciliation
payment associated with A.D.'s education. (Id.,
Exs. 1 & 2 (Hearing Officer's Decisions).) The
hearing officer made findings of fact, which include,
inter alia, that the “contract between
[Kenderton Charter] and [Y.A.L.E.] did not allow [Y.A.L.E.]
to charge [P]arent for FAPE related costs”; Y.A.L.E.
could not directly or indirectly force or encourage Parent to
pay for FAPE services when Kenderton Charter placed Students;
Parent had no obligation to pay Y.A.L.E. tuition invoices
that Kenderton Charter owed to Y.A.L.E.; and Parent
voluntarily paid the tuition invoices via the trusts that
Kenderton Charter owed to Y.A.L.E. (Id. ¶ 64.)
January 22, 2018, PDE filed an Amended Complaint against
Parent under the IDEA and brought state law claims against
Y.A.L.E. for unjust enrichment and indemnification. As it
pertains to Parent, PDE seeks reversal of the hearing
officer's decisions requiring it to pay the monthly
invoices and tuition reconciliation. In the alternative, PDE
seeks damages from Y.A.L.E. for unjust enrichment and
indemnification in the event the hearing officer's
decisions are not reversed. On March 6, 2018, Y.A.L.E. filed
a Motion to Dismiss the claims asserted against it under
Federal Rule of Civil Procedure 12(b)(6). For the reasons
that follow, Y.A.L.E.'s Motion is granted in part and
denied in part.
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the sufficiency of a complaint. Kost v.
Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). “To
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 679 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007))
(internal quotation marks omitted). In deciding a motion to
dismiss under Rule 12(b)(6), courts must “accept as
true all allegations in the complaint and all reasonable
inferences that can be drawn from them after construing them
in the light most favorable to the nonmovant.”
Davis v. Wells Fargo, 824 F.3d 333, 341 (3d Cir.
2016) (quoting Foglia v. Renal Ventures Mgmt., LLC,
754 F.3d 153, 154 n.1 (3d Cir. 2014)) (internal quotation
marks omitted). However, courts need not “accept mere
conclusory factual allegations or legal assertions.”
In re Asbestos Prods. Liab. Litig. (No. VI), 822
F.3d 125, 133 (3d Cir. 2016) (citing Iqbal, 556 U.S.
at 678-79). “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Twombly, 550 U.S. at 555.
Finally, we may consider “only the complaint, exhibits
attached to the complaint, matters of public record, as well
as undisputedly authentic documents if the complainant's
claims are based upon [those] documents.”
Davis, 824 F.3d at 341 (quoting Mayer v.
Belichick, 605 F.3d 223, 230 (3d Cir. 2010)) (internal
quotation marks omitted).